Paul Manafort's trial is about Putin, not tax evasion

By David Eckels Wade

2 August 2018 — 4:47pm

The trial of Paul Manafort has begun. The first of 35 federal grand jury targets to face allegations in court, Donald Trump's former campaign manager stands accused of more than 30 criminal counts in a Virginia federal court.

The granularity of the charges might lead us to believe it's a trial about tax evasion, or the failure to comply with arcane regulations covering registration as a foreign agent, or money laundering to hide the resources required for the lavish lifestyle, the expensive rugs and bespoke suits to which Manafort became accustomed.

It isn't. This trial is about how Russia moves money and buys influence.

Loading

Advertisement

We probably won't hear much about that in court. Special Counsel Robert Mueller's team, which brought charges against Manafort as part of its investigation into Russian interference in the 2016 US presidential election, has said it will not bring forward evidence regarding Russian coordination with US campaigns at the trial. But that background is what we need to keep in mind when the coverage gets lost in the language of taxation and regulation.

Manafort's trial is no more about tax evasion than former House speaker Dennis Hastert's 2016 trial was about wire fraud rather than sexual abuse. It's a trial about the astonishing ways in which Vladimir Putin effectively transformed Manafort into a Kremlin subsidiary, first in Ukraine and then in the US, turning a famed Washington political operative like Manafort - once adviser to Ronald Reagan and George Bush snr - into a Russian stooge.

To understand why, you have to begin where the Manafort-Putin journey began: in eastern Ukraine. It's no secret that Putin called the breakup of the Soviet Union the greatest tragedy of the 20th century. The Russian president sought to maintain control over former Soviet states, none more so than Ukraine, birthplace of Soviet leader Nikita Khrushchev and home to the Russian Black Sea Fleet. In 2004, Putin was enraged when the "Orange Revolution" freed Ukraine from the Kremlin's tight grip.

Russian President Vladimir Putin, right, with his Ukrainian counterpart Viktor Yanukovych in Moscow in 2013.Credit:AP

Putin's choice to run Ukraine was a burly former coal miner named Viktor Yanukovych, whom Putin bankrolled against his pro-Western rival, Viktor Yushchenko. For the crime of opposing Putin's favoured candidate, Yushchenko was not-so-mysteriously poisoned.

While Yushchenko bested Yanukovych at the ballot box, Putin sowed division in Ukraine. Putin attacks democracies with a well-honed strategy; methodically, with incredible calculation. He orchestrated a Yanukovych comeback as prime minister in 2006 and president in 2010, masterminded by campaign consultant Manafort. Putin vowed never to lose control of Ukraine again. Manafort airbrushed Yanukovych's record of corruption, mismanagement and alleged ties to the KGB. The campaign came from Washington, but the money came from Moscow.

For more than a decade before joining Trump's election effort in 2016, Manafort's Kremlin ties deepened. There was no daylight between Yanukovych and Putin, and no daylight between Yanukovych and Manafort.

Until he was forced to flee to Moscow in 2014 following a popular revolution, Yanukovych kept Ukraine exclusively allied with Russia. He was responsible (purportedly at Manafort's suggestion) for a 2012 law allowing the adoption of Russian as one of Ukraine's official languages and for barring Ukraine's potential entry into NATO. Ultimately, Ukrainians got tired of Moscow's heavy hand, and the last straw was Yanukovych signing an exclusive trade agreement with Russia and eschewing a broad trade regime with the European Union and the US. For more than a decade of service to a Putin puppet, Manafort reportedly collected $US60 million.

Protesters throw tyres in a fire as they clash with police in central Kiev in January 2014, during the euromaidan uprising that resulted in Yanukovych fleeing to Russia.Credit:AP

Manafort also became deeply indebted to a Putin crony, borrowing millions from the Russian aluminium magnate Oleg Deripaska - and, according to an Associated Press report, in 2005 even pitched Deripaska on an idea Manafort pledged would "greatly benefit the Putin Government" by influencing politics, business dealings and news coverage inside the US, Europe and former Soviet republics. In 2006, Manafort signed a $US10 million annual contract with Deripaska.

Russian aluminium magnate Oleg Deripaska, the subject of US sanctions.Credit:Bloomberg

Fast forward to 2016 and today. Deep in debt in spite of his multimillion-dollar fees, Manafort ingratiated himself with Trump and was said to have offered Deripaska "private briefings" on the Republican campaign.

Manafort signed on to oversee the party's nominating convention in Cleveland where, perhaps not coincidentally, an effort to include traditional Republican rhetoric in platform planks critical of Russia's annexation of Crimea were killed in the cradle.

Manafort became campaign chairman. Court filings tell us that he participated in the Trump Tower meeting on June 9, 2016, in which Kremlin-linked Russians were said to have offered compromising information on Trump's rival, Democratic presidential candidate Hillary Clinton, and that Manafort may have joined what Rudy Giuliani now describes as a meeting two days earlier to plan "the strategy of the meeting with the Russians".

Mueller will have to tie together the facts of Manafort's activities in 2016. The special counsel is a professional capable of presenting that case with precision that an outside observer never could, and his 35 indictments and five guilty pleas to date underscore that he's doing his job well.

But make no mistake, we already know what this trial is all about. F. Scott Fitzgerald wrote that his tragic protagonist Gatsby's fixation, Daisy Buchanan, had "a voice full of money".

Paul Manafort had a voice full of rubles, and he used it in Ukraine and in the United States - for Vladimir Putin.

Reuters

David Eckels Wade was chief of staff to the chairman of the Senate Foreign Relations Committee and chief of staff to the US State Department from 2013-2015.